There is growing concern on how Nigeria’s economy can survive the economic dip at this crucial time as global oil price is crashing following trade challenges occasioned by the outbreak of coronavirus.
There is need for critical thinking and implementation of ideas to help the Nigerian economy survive and not suffer a second recession in coming days.
The answers to part of the economic dip in Nigeria can be highlighted in some of the projects that can be used as potential game changers and bring about an upturn in the economic fortunes of the nation.
Some of these projects include; oil production, the Lagos-Kano railway project, comatose seaports, and the power sector among others.
There would be need to fix the country’s seaports as posited by the Nigerian Ports Authority (NPA). The country has six seaports: Apapa and Tin Can in Lagos, Onne and Port-Harcourt ports in Rivers State, Warri Port, and Calabar Port. Out of the six ports identified only the Lagos ports are operating anywhere near full capacity.
The fate of this country’s trade currently rests on the efficiency of the ports after the recent crash of oil revenue, thereby making fixing the ports a potential game changer for the economy.
Also, there is hope for the nation’s economy if the Lagos-Kano railway project is completed. This project will connect major cities and facilitate trade feature heavily on the list with the Lagos-Ibadan Expressway and an eastern rail line that perhaps connects Lagos to Calabar. Anything that facilitates the ease of moving people and their goods and services will certainly have a big impact on economic activity of a nation.
The power sector is another economic game changer; Projects targeted at Nigeria’s power transmission should also be prioritised to help save the economy.
Six years since Nigeria privatised its power sector; the lights are still out with the economic activity while driving up the cost of doing business.
The power sector has been trapped in a dilemma with available generation still standing at around 4000MW for over 200 million people. While the control of electricity generation is currently in the hands of the private sector, the government wholly controls the transmission segment, and owns 40 percent stake in the distribution companies. It is better as it stands now for the government to let go of transmission and fully liberalised the sector.
Looking at the breakdown of the $22 billion borrowing plan that the Senate just approved, it’s a clear case of misplaced priorities as most of the projects in there are not even viable.
The borrowing plan that will see the government spend over half a billion dollars each year in interest payments for an average of 21 years on a bunch of infrastructure projects.
Questions have to be asked to know if borrowing such huge amount and ending up paying interest is worth it. Is there a future in the Nigeria economy when we keep paying debts? Will the loans be invested in infrastructure, from transport to power, as highlighted in the breakdown and not frittered away with nothing significant to show for it?